#BhartiAirtelLimited – 𝐀𝐚𝐝𝐫𝐢𝐤𝐚𝐚 𝐋𝐞𝐠𝐚𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐀𝐋𝐒)

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 07.01.2026

CESTAT Delhi Sets Aside Customs Order: Classification of Router Components Under CTI 8517 70 90 Upheld

This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, recently delivered a significant judgment in the case of M/s Bharti Airtel Limited vs. Principal Commissioner of Customs. This case revolved around the classification of imported components of Juniper routers and the invocation of the extended period of limitation under Section 28(4) of the Customs Act, 1962. The decision, pronounced on January 6, 2026, has far-reaching implications for importers and the interpretation of customs tariff classifications.

Background of the Case

M/s Bharti Airtel Limited filed an appeal against the order dated October 4, 2023, passed by the Principal Commissioner of Customs, New Delhi. The dispute centered around the classification of certain imported items, including Modular Port Concentrators (MPCs), Modular Interface Cards (MICs), Fixed Configuration MPCs, Switch Fabric Boards, and Switch Control Boards. These items were imported as parts of Juniper routers between April 2017 and March 2018.

The appellant classified these items under Customs Tariff Item (CTI) 8517 70 90, which pertains to “Parts” of communication apparatus, attracting a lower duty rate. However, the department reclassified the items under CTI 8517 62 90, which covers “Machines for the reception, conversion, and transmission or regeneration of voice, images, or other data, including switching and routing apparatus,” attracting a higher duty rate. The Principal Commissioner also imposed penalties and interest, invoking the extended period of limitation under Section 28(4) of the Customs Act.

Key Issues in the Case

Classification of Imported Items: The primary issue was whether the imported items were “parts” of routers (CTI 8517 70 90) or independent apparatus (CTI 8517 62 90). The appellant argued that the items were integral components of Juniper routers and could not function independently, while the department contended that the items had distinct functionalities and were classifiable as “Network Interface Cards” (NICs).
Extended Period of Limitation: The department invoked the extended period of limitation, alleging that the appellant intentionally misclassified the items to evade customs duty. The appellant challenged this, arguing that the classification dispute was based on a genuine difference in interpretation and did not involve any malafide intent.

Tribunal’s Observations and Decision 

Classification of Imported Items 

The Tribunal analyzed the technical specifications and functionalities of the imported items, relying on the manufacturer’s certificate and industry definitions. Key findings included:

The imported items were integral components of Juniper routers and could not perform independently. They required integration with other parts of the router to function.
The items did not meet the definition of NICs, as NICs are standalone apparatus capable of independent operation, whereas the imported items were inseparable from the router system.
The Tribunal referred to its earlier decision in Vodafone Idea Limited vs. Principal Commissioner of Customs, where similar components of CISCO routers were classified under CTI 8517 70 90. It found the components of Juniper routers to be functionally and structurally identical to those of CISCO routers.

Based on these observations, the Tribunal concluded that the imported items were correctly classifiable under CTI 8517 70 90 as “parts” of routers, and not under CTI 8517 62 90.

Extended Period of Limitation 

The Tribunal rejected the department’s invocation of the extended period of limitation, citing the following reasons:

The appellant had disclosed all relevant information and filed returns as required under the self-assessment scheme.
The classification dispute arose from a genuine difference in interpretation of legal provisions, which does not constitute deliberate suppression or malafide intent.
The Tribunal referred to precedents, including Stemcyte India Therapeutics Pvt. Ltd. vs. CCE & ST and Commissioner of C. Ex. & Customs vs. Reliance Industries Ltd., which emphasized that extended limitation cannot be invoked in cases of bonafide belief or disputes over legal interpretation.

Final Order

The Tribunal set aside the Principal Commissioner’s order, allowing the appeal in favor of M/s Bharti Airtel Limited. It held that the imported items were classifiable under CTI 8517 70 90 and that the extended period of limitation was not applicable.

Implications of the Judgment

This landmark decision has several implications for importers and the customs classification process:

Clarity on Classification of Router Components: The judgment reinforces the principle that components of routers, which cannot function independently, should be classified as “parts” under CTI 8517 70 90. This provides clarity for importers dealing with similar products.
Extended Period of Limitation: The Tribunal’s observations on the extended period of limitation highlight the importance of proving deliberate suppression or malafide intent. Genuine disputes over classification cannot justify the invocation of extended limitation.
Reliance on Manufacturer’s Certification: The Tribunal placed significant weight on the manufacturer’s certificate, which clarified the functional utility and inseparability of the imported items. Importers should ensure they obtain detailed certifications from manufacturers to substantiate their claims.
Precedential Value: The Tribunal’s reliance on the Vodafone Idea Limited case underscores the importance of consistency in classification decisions. Importers can refer to this judgment in similar disputes to support their classification claims.

Conclusion

The CESTAT’s decision in the Bharti Airtel Limited case is a significant development in customs law, providing clarity on the classification of router components and the application of the extended period of limitation. It underscores the importance of technical analysis, manufacturer certifications, and bonafide belief in resolving classification disputes. This judgment will serve as a valuable precedent for importers and legal practitioners navigating similar issues in the future.

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